Chairwoman of the Holding Company for Tourism, Hotels, and Cinema (HOTAC) Mervat Hataba expected that profits of the Fiscal Year (FY) 2015/2016 will decline by 30% compared to target profits.
She said that HOTAC’s budget targeted reaching profits of EGP 381m compared to profits of EGP 61m in FY 2014/2015.
Hataba said profits of her company during the first half of FY 2015/2016 was EGP 130m through contributions from the private sector and operational profits that resulted from tourism activity. The expected decline may be the result of the Russian plane crash on 31 October and the decline of inbound travel in Egypt during the past three months.
Tourism income dropped to $6.1bn in 2015 due to the severe decline of tourism during the last quarter of 2015. Russian tourism represents 35% of total annual inbound tourism in Egypt, whereas British tourism represents 11%.
Britain and Russia suspended all their tourist flights to Sharm El-Sheikh and other tourist destinations on the Red Sea. Hataba said the decline in profits in FY 2015/2016 has not affected the company’s investment plan and the development of its assets to maximise revenues.
Hataba said the company is expanding and developing its hotels and it will add new 4-star hotel rooms, which are currently needed in the market. The company has more than one hotel in Cairo, which will be developed in accordance with the market’s needs, including Shepherd Continental and Cleopatra.
“The company will develop Continental hotel in downtown Cairo and it has contracted with Dr. Abdulrahman Consultative Office to implement the development studies,” Hataba said.
Last week, the Cabinet approved the renovation of the hotel in accordance with its distinctive architectural character. The renovation plan is based on the demolition of part of the building and keeping the other part. The authority will compensate the owners of the shops in the ground floor for three years and will pay them ten times their rent after the development process.
The investment cost of the project is an estimated EGP 950m. “HOTAC is waiting for the consultant’s report on the technical condition of the building to put the schedule of development and renovation project,” she said.